China's SAFE to Open Pilot Regions for Policy of Export Earnings Kept Abroad Including Beijing in October 2010
[2010-08-31 09:06:05]
To further deepen the structural reform of foreign exchange management, improve the efficiency in the use of funds of domestic enterprises, and promote trade facilitation, recently, the State Administration of Foreign Exchange (SAFE) of P. R. China issued the Notice on Carrying out Pilot Projects for Policy of Export Earnings Kept Abroad in Certain Regions.
As per the Notice, as of October 1, 2010, pilot projects for policy of export earnings kept abroad (hereinafter referred to as pilot projects) shall be carried out in 4 provinces (cities) including Beijing, Guangdong Province (including Shenzhen), Shandong Province (including Qingdao), and Jiangsu Province with a period of 1 year.
The Notice also says that the local branches and administrative departments under the SAFE in the pilot regions shall examine and verify the qualification of enterprises in accordance with the Pilot Measures for Administration of Export Earnings Kept Abroad in Goods Trade.
During the pilot period, the number of pilot enterprises verified by each branch shall be no more than 10.
Main content of the policy includes:
First, the SAFE shall approve domestic enterprises' opening accounts overseas on the basis of strict verification on enterprise qualification, and such overseas accounts shall be used to deposit the export earning of domestic enterprises with a real and legitimate transaction background, and used for foreign payments in goods trade and some service trade as well as capital accounts approved or registered by the SAFE.
Second, the SAFE shall conduct scope management over the total funds deposited overseas by domestic enterprises.
Third, simplifying business operations like import and export cancel after verification and networking examination, and applying post-incident report system to enterprises and banks.
Fourth, the SAFE shall conduct off-set monitoring over the revenues and expenditures of domestic enterprises' overseas accounts and implement on-site verification for abnormal conditions.
The pilot project of export earnings kept abroad is a beneficial exploration in improving the existing trade management of foreign exchange revenue and expenditure.
On one hand, it can enrich the adjustment means for international balance of payment; on the other hand, it may facilitate the operation of funds for domestic enterprises, as to enterprises with the frequent cross-border trade balances, it is conducive to reduce the cross-border transfer fees and exchange costs of foreign exchange funds, and as to enterprises with a higher degree of participation in international markets and strong group management abilities, it is beneficial for them to improve the efficiency in use of funds and reduce the financing costs overseas so as to further enhance their international competitiveness.
As per the Notice, as of October 1, 2010, pilot projects for policy of export earnings kept abroad (hereinafter referred to as pilot projects) shall be carried out in 4 provinces (cities) including Beijing, Guangdong Province (including Shenzhen), Shandong Province (including Qingdao), and Jiangsu Province with a period of 1 year.
The Notice also says that the local branches and administrative departments under the SAFE in the pilot regions shall examine and verify the qualification of enterprises in accordance with the Pilot Measures for Administration of Export Earnings Kept Abroad in Goods Trade.
During the pilot period, the number of pilot enterprises verified by each branch shall be no more than 10.
Main content of the policy includes:
First, the SAFE shall approve domestic enterprises' opening accounts overseas on the basis of strict verification on enterprise qualification, and such overseas accounts shall be used to deposit the export earning of domestic enterprises with a real and legitimate transaction background, and used for foreign payments in goods trade and some service trade as well as capital accounts approved or registered by the SAFE.
Second, the SAFE shall conduct scope management over the total funds deposited overseas by domestic enterprises.
Third, simplifying business operations like import and export cancel after verification and networking examination, and applying post-incident report system to enterprises and banks.
Fourth, the SAFE shall conduct off-set monitoring over the revenues and expenditures of domestic enterprises' overseas accounts and implement on-site verification for abnormal conditions.
The pilot project of export earnings kept abroad is a beneficial exploration in improving the existing trade management of foreign exchange revenue and expenditure.
On one hand, it can enrich the adjustment means for international balance of payment; on the other hand, it may facilitate the operation of funds for domestic enterprises, as to enterprises with the frequent cross-border trade balances, it is conducive to reduce the cross-border transfer fees and exchange costs of foreign exchange funds, and as to enterprises with a higher degree of participation in international markets and strong group management abilities, it is beneficial for them to improve the efficiency in use of funds and reduce the financing costs overseas so as to further enhance their international competitiveness.
Source: ETCN
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